Can 24/7 supply chain operations save Christmas?
President Joe Biden last week said the government is partnering with major ports, retailers and carriers to ramp up efforts to relieve some of the port congestion threatening holiday sales and escalating inflation.
Ports in Los Angeles and Long Beach, which together bring in 40 percent of the country’s shipping containers, will expand to “24/7 service” to handle an estimated 500,000 containers waiting on cargo ships offshore. The ports are typically closed down at night and on weekends. With highways less crowded in the evening, cargo can also leave ports at a faster pace.
At the same time, Walmart, Target, Home Depot, FedEx, UPS and Samsung have committed to round-the-clock logistics operations to deliver the goods to warehouses, stores and homes. Walmart is committing to as much as a 50 percent increase in the use of off-peak hours.
Senior administration officials said the commitments will “pave the way for smaller retailers to also get their goods from a 24/7 model.”
No guarantees were given that holiday disruptions would be avoided. Officials noted that outside factors contributing to the disruptions include expenditures shifting from services to more durable goods during the pandemic and the spike in online purchases. Pandemic-related shutdowns or slowdowns at foreign factories and ports are also a contributor. The administration is hoping donations of vaccine doses across Southeast Asia will help.
Longer term, the Biden administration is seeking “the biggest investment in ports in our history” as the country’s shipping and freight infrastructure is being overwhelmed by import-export volume. The investments will also add flexibility to handle a pandemic, extreme weather, climate change, cyberattacks or other unexpected disruptions.
Ultimately, however, the supply chain is run by the private sector, including terminal operators, railways, trucking companies, shippers and retailers, and they’ll need to “step up” to solve the problems, according to Pres. Biden.
In a blog entry, Target said that it is open to expanding the country’s infrastructure to provide for greater movement of goods and to increasing data sharing across industries to help with port traffic control. The discounter added, “We also support exploring the expansion of offsite storage for slow-moving containers to allow easier access to containers moving more quickly.”
- Remarks by President Biden on Efforts to Address Global Transportation Supply Chain Bottlenecks – White House
- Background Press Call on Global Transportation Supply Chain Bottlenecks – White House
- Walmart, FedEx, UPS will increase operations to ease supply chain bottlenecks, Biden says – NBC News
- Biden enlists Target, Walmart to fix bottlenecks threatening holiday – Reuters
- Peek Behind the Scenes at How Target’s Prepping Our Supply Chain to Deliver Holiday Joy All Season Long – Target
- Some think supply chain disruptions are here to stay until 2022 – RetailWire
- How can retailers best navigate supply chain turbulence? – RetailWire
DISCUSSION QUESTIONS: What near-term solutions do you see to reduce or resolve the country’s stubborn supply chain disruption? Which of the steps cited in the article will likely offer the biggest benefit?